[4]The challenge is substantial. Despite good progress over the past decade and a reduction of 45 million in the number of out-of-school children, there are still 57 million children out-of-school, and 250 million children who are in school but who are not learning. Most of these are from marginalized and disadvantaged groups. Keeping the global promise of universal access for all children will require more money, as part of the solution. After taking account of available domestic resources, the EFA GMR estimates[5] that an additional $26 billion will be needed per year to make sure all children receive a basic education by 2015. This gap will need to be filled by domestic as well as international resources.

Multilaterals’ significance in financing education and their unique capacity to pool funding, convene donors and fill gaps as lenders of last resort, provides them with an opportunity to play a significant role. But have they? Based on a combination of data analysis and case studies of the 6 most important multilaterals in education, we find that:

Education has become a lower spending priority for multilaterals. Aid from multilaterals to education has grown over the past decade but aid to other sectors has grown faster. In addition, the share of basic education in total multilateral aid to education has been falling with their attention shifting towards postsecondary education.

Despite a good deal of “coordination activity” led by multilaterals, fragmentation remains high in the sector. More than one third of donor relations in education are non-significant as defined by the OECD-DAC, meaning either that the donor is small in absolute terms or that it gives a particular country less education aid than it gives on average.

Multilaterals have often not been able to fill gaps. While the cost to provide a quality primary education is estimated to be $131 per child, governments in LICs allocate, on average, only $41 per child to primary education, while they receive $16 per primary-school-age child from aid donors. But huge variation exists. In 2011, aid per primary aged child amounted to $63 in Haiti and $7 in the DRC. Among 41 countries in need, more than half received $10 or less from bilateral donors, suggesting there was a need for multilateral agencies to fill the gap (see figure). But we find that, despite strong need, the five biggest multilaterals in education were only able to fill the gap in 6 countries.

Innovative finance has also not benefited education. During the past 15 years, aid agencies have increasingly sought to mobilize “innovative finance” for development goals. Overall innovative finance is estimated to have amounted to $53 billion between 2000 and 2008, with multilateral institutions often at the forefront of catalyzing such funds, usually in partnership with bilateral donors. But, the education sector has not been a major beneficiary of these efforts. A review of the World Bank’s innovative financing found that while the Bank accounted for more than 40 percent of global official resources mobilized through innovative projects between 2000 and 2008, the education sector received less than 2 percent, while health received 12 percent.

So what is going on and what can be done about it? Case studies of multilateral institutions reveal that they struggle to promote global strategic priorities. Three opportunities for action stand out.

Address perceptions of weak demand. When asked why support for education is not higher, senior managers in multilateral organizations usually cite a lack of demand for support as the main reason. This finding contradicts results from client surveys. For example, education is the sector with the highest demand for support by partner countries (by 41 percent of respondents) in World Bank client countries. So who is right? Evidence suggests that weak demand for multilateral financing is often prompted by a perception of a lack of priority on the part of the donor agency and/or a perceived lack of capacity which is increasingly a reality. This indicates stronger prioritization of education among multilaterals at country level is needed. Moreover, where demand is weak, a critical question is whether multilateral donors should or could play a role in influencing the demand in basic education in countries with clear needs. This has clearly been done in other high priority sectors such as governance or climate change. While respecting country ownership and serving as genuine partners in development, multilateral agencies have and can influence demand, provided they are given the right incentives and instruments to do so. World Bank trust funds, for example, now bigger than IDA, have been used to finance specific issues and fill gaps in aid.

Coordinate supply. High-level global leadership and a global platform to mobilize and coordinate support to countries in need are urgently needed. While much progress has been made in promoting aid effectiveness, much less attention has been paid to ensuring resources are adequate across countries. In addition, consequences of donor withdrawals from the basic education sector are not clarified or discussed. The past year has seen increasing attention and high-level political attention to education including through the launch of the Global Education First Initiative[6], the appointment of a UN Special Envoy for Global Education[7] and the organization of a series of high level Learning for All meetings[8] in April and September. It will be important to capitalize on this new political momentum in the education sector. The Global Partnership for Education (GPE)[9] has the potential to play a strong leadership role, including in coordination at the country level.

Data, data, data. Financial data on education are astonishingly incomplete. The need for a data revolution[10] in development has been noted earlier on this blog and the education sector is facing a particularly tough challenge. Try to find integrated financial data on all the sources of funding, comparable across countries and you will become very frustrated. Multilaterals could lead on improving the information and data on education financing needs. National education accounts, supported by multilateral agencies, could provide this information. While similar accounts for health have already been institutionalized in more than 190 countries, only a handful of countries have explored their use in education. Let’s measure what we treasure.